There comes a point when every successful one man business outgrows itself and requires extra manpower. In such a situation, you need to decide whether it’s more profitable to turn down business or take on employees. Choosing the latter might seem like the most obvious path to take, but might not be the most suitable if you’re not prepared for it. Here are a few considerations to make before taking the decision to become an employer.
One way to save costs, time and energy may be to outsource a few tasks, giving you more time to focus on the important stuff. Most business owners will start by outsourcing the time-consuming and difficult admin work such as accountancy or marketing. However, you can outsource many other roles.
Some business owners will choose to outsource a virtual assistant that can answer phone calls, manage emails and do other organizational tasks. By hiring over the web, no extra office space is required. You can communicate via email, phone and video communication giving you the ability to hire from anywhere in the world, not limiting your scope to your local area.
Don’t be afraid to outsource your weaknesses. If Twitter and Facebook aren’t your areas of expertise, you may be able to outsource a company to manage your social media. Use outsourcing to delegate those undesirable jobs and focus on the main roles of your job.
Consider part-time staff
Some work can’t be outsourced and requires a permanent member of staff on the premises. However, if you haven’t got a huge workload to give away and want to save costs, you could opt for part-time staff over full-time employees.
Hiring part-time staff has its risks as you’re less likely to find someone willing to stick it out for the long run. Many people looking for part-time work are students, retirees or those easing into work after maternity leave or an injury. This could result in a fast turnover that requires spending more money on recruitment.
Consider a co-owner
If you need to delegate more complex or experience-heavy roles and the workload is greater than part-time can allow, you may be able to save costs on a full-time experienced employee by making them a co-owner. This will result in sharing the responsibility of your business, and so you should hire carefully in order to find someone you truly gel with and trust. However, both of you will be able to share costs of the business – also reducing the need for insurance schemes such as employee liability, and losing the restrictions of various laws. Family members or friends in the same industry can make excellent co-owners and business partners.
If none of the above methods are feasible, then employing staff the traditional may be your best option.
Know the costs
Your employees’ wages aren’t the only costs you need to prepare for when becoming an employer. Hiring full-time employees means that you’re legally obliged to take out employers liability insurance. There are other insurance schemes that you can take out such as professional indemnity insurance, but these aren’t compulsory.
You’ll also have to budget for employee absence. This includes sick pay, maternity pay, holiday pay and recruitment costs for when employer leaves. New laws will also require employees to also pay for pensions, whilst obligatory overtime pay seems also likely to be a thing of the future. Ensure you have some funds aside to pay for these eventualities.
There are many other costs that you may wish to pay your employees including incentives such as end-of-year bonuses, office treats, Christmas parties and work phones. Create a financial plan and see what you can realistically afford to spend.
Read up on the legalese
Employees have rights – lots of them. There are laws regarding how to treat staff, health and safety features that need to be added to the office and compulsory schemes that you need to be a part of.
Keeping track of them all of these can be difficult. There are many sites such as https://www.usa.gov/ that can help you brush up on employment laws yourself. Most business owners will use a HR consultancy service such as http://www.elliswhittam.com/ to help get their head around it all. Having a lawyer on call is also recommended – you may also need a solicitor to help whip up a legally solid employment contract. This will protect you and your business as well as your employees.
Plan how to make use of your new free time
By taking on staff, you should have a lot more time on your hands. You need to plan how you’re going to effectively use this time. In the first few weeks, you’ll most likely be spending this time training and monitoring your new staff but eventually the time will become yours. Make sure that you spend this new time wisely – either to expand more through marketing or to focus on more organizational tasks within the business. Be careful of hiring employees as a way of giving yourself a break – you’ll still need to be around to run things and using the opportunity to work less hours could encourage lazy habits.
Prepare your workplace
Hiring full time employees may require making adjustments to your premises. Some of these may be health and safety requirements such as a fire extinguisher or adding a fire alarm, whilst others may be more general practical alterations such as having a suitable desk space for them to use. If you’re employing workers with a disability, you may need to make legal changes to the premises such as inserting grab bars and keeping corridors clear.
If you haven’t currently got an office, note that you may be able to hire employees that can work from home. This won’t be suitable for all lines of work, but for digitally focused trades it’s now very practical due to recent technologies such as cloud sharing and video communication. If instead you choose to buy or rent an office, make sure that it has the potential for growth and that its location is convenient enough to commute to.